Last editedMar 20222 min read
Selling your goods or services to an overseas clientele can open up new revenue streams and help you grow your brand. However, it can also present a host of logistical and legislative complications. In order to remain compliant when expanding into new territories, it’s essential you familiarise yourself with distance selling regulations at home and overseas – especially in the post-Brexit global market.
Although the term ‘distance selling regulations’ is still commonly used, the legislation actually changed in 2014. It is now known as consumer contracts regulations.
Here’s everything SMEs need to know before they accept orders from international customers.
Distance selling laws at a glance
Under distance selling regulations, sellers must provide the following information about goods and services offered for purchase online, over the phone or via mail order:
a description of the product or service
the price (including delivery costs)
consumer’s cancellation rights
the minimum duration of service contracts
seller’s contact information
seller’s VAT number (if registered)
delivery and payment options
delivery charges where covered by the consumer
total costs and how they are calculated
minimum contract length for service agreements
This must be communicated clearly in an appropriate format. This is usually in the terms and conditions section of a written contract. It must be communicated verbally over the phone.
When an order is placed, sellers are legally required to provide further information in writing or by email.
all of the information provided above
how buyers can exercise their right to cancel / return their order
who is responsible for the cost of returns (by default, this is the responsibility of the seller)
Distance selling and cooling-off periods
Under current long distance selling regulations (consumer contracts regulations), consumers have the right to cancel their contract with service providers within a 14-day cooling-off period without having to pay any exit fees or costs associated with ending their contract early. Sellers must also provide access to a standard cancellation form to ensure that cancelling is easy for consumers. This 14-day period begins the moment the contract starts.
The only exception to this is digital content. If digital content is downloaded within this 14-day period, consumers must agree to waive their cancellation rights.
Distance selling and returns
Sellers are obliged to make their returns policy clear to customers, including who bears the responsibility for recovering the postage costs associated with returning items that are faulty or not as described. If this is not made clear to the consumer (either on the seller’s website or elsewhere) the responsibility for covering this cost falls to the seller by default.
There are some items where the right to cancel does not apply. These are typically items that are sealed such as CDs, DVDs and software discs as well as products that must be sealed for health and hygiene reasons.
Distance selling timeframes
Under the 2015 Consumer Rights Act, consumers are required to establish a timeframe for goods to be received. A default delivery period of 30 days applies, within which sellers need to deliver the goods to the consumer, unless a longer period has been established with the buyer.
Distance selling and VAT
Distance selling regulations previously stated that businesses only needed to register for VAT if their sales revenues exceeded a certain threshold. The distance selling threshold was previously £70,000. Under new rules, however, this is no longer applicable for UK businesses. If businesses sell goods or services overseas, you must register for VAT even if the value of your sales falls below this amount in a given year.
We can help
If you’re interested in finding out more about distance selling regulations and how they apply to your business, then get in touch with our financial experts. Discover how GoCardless can help you with ad hoc payments or recurring payments.